November 8, 2010

 Global economic powerhouse  Poverty  Outsourcing  Bollywood  Corruption  Nuclear power 2

I. What was the nature of India’s ‘elephant’ phase? II. What is the nature of India’s ‘tiger’ phase? III. How did this transformation come about? IV. What kind of ‘development’ would we call this? 3

 Low economic growth  Big state and state interventionism  State protectionism  No corporate growth, low corporate profitability  No global role 1980-present  ‘Miracle’ rates of growth (9-7%)  Less state  High corporate growth & profitability  Spectacular global role  Foreign exchange reserves at 279 billion USD  Foreign companies 4

 The top 40’s worth is 243 billion, up from 229 billion a year ago, but still shy of the 351 billion record in  4 richest Indians are worth a combined $86 billion, (down from 180 billion 3 years ago). (forbes) 5

 47 Indian companies are on Forbes Global  Of the top 50 economic entities in the country, 30 are companies (by sales)  The sales of Tata Steels is about the size of Kerala, and Reliance sales is about $2 billion larger than Kerala  WIPRO is about 5 times the SDP of Manipur, and INFOSYS about 4 times  Sales of Reliance and Tata Steel are each equal to the GDPs of the poorest 12 states

 The aggregate sales of the top 50 corporations amount to $8 trillion - double the GDP of China and 8 times the GDP of India.  Wal-Mart’s revenues were about 5 times the GDP of Bangladesh; Vodafone is bigger than Ecuador; Exxon was almost 14 times Kenya etc.  The aggregate sales of the top 3 companies, Royal Dutch Shell, Exxon Mobil and Wal-Mart exceed the GDP of the entire African continent ($1.289 trillion and $1.281 trillion for 2008 respectively)  The combined sales of the Forbes Global 2000 of $29.78 trillion equal the GDP of the 5 richest countries: US, Japan, China, Germany, and France. It equals the GDP of all 179 countries taken together minus the richest 5.

 Under $1 a day: 34.3%  Under $2 a day: 80.4%  Under national poverty line: 37.2% (debated figure)  Ranks 67 out of 88 on the Hunger Index; worse than Nepal, Pakistan, China, Sudan  Farmer suicides – close to 200,000 suicides between (one suicide every 30 minutes) 8

Why this miracle?  “freedom” from the state  Less regulation  High consumption  Globalization: free trade, more foreign investments, more active stock market Why such inequality?  Still a lot of regulation  High dependence on agriculture  Not enough skills  Bad governance  “People are not able to take advantage of globalization”

Alternative explanations

 State-business collaboration  Cheap inputs provided by the state for development of business  Nationalized banking gave control over the savings of the common person to the government which could then be channeled to big business  Protectionist: similar to ISI model 11

 General feature: high corporate profits but low output, low growth  large oligopolies  No domestic competition  No global competition 12

 Rajiv Gandhi, the PM, and a number of other politicians and business leader see opportunity  Division within Indian business re:globalization  Globalizers win, lots of profit to be made  Foreign companies eye large domestic market 13

 Deepening fiscal crisis  Acute foreign exchange crisis  In 1991 in takes a loan from the IMF  Beginning of the process of structural adjustment and neoliberal reforms 14

 Easing entry of foreign corporations  Easing labour and environmental regulations (especially in export processing zones)  Less state regulation  More competition  Privatization of public sector companies 15

Drivers of the ‘miracle’:  Outsourcing and growth of service sector  Sell-offs of Indian companies  Low cost production  Lay offs and restructuring  Growth of the middle class with phenomenal growth in salaries 16

 Spectacular growth of the ‘informal sector’  Inequality across caste, gender and religion  Issues such as female infanticide 17

18 Agrarian Crisis (photos by P.Sainath, the foremost journalist in India who reports on these suicides)

 shtra/maharashtra.htm shtra/maharashtra.htm 19

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 One author has called them neoliberal deaths  Neoliberalization of agriculture to increase productivity and growth  Withdrawal of state support and public investment  Private debt  High-yielding seeds, chemical inputs, pesticides  Input cost rose %  Cycle of debt and distress

 Modernization: growth, efficiency, productivity  Capability: education, health, income  Social power: justice, difference, agency

26  70% survive on agrarian incomes  93% work in the informal sector  80% live in under $2 a day  42 million live in slums  2 million are homeless  90 million are marginal workers

 The state?  Educational institutions?  Political sphere?

28 There are several social groups in India which have been historically disadvantaged  Scheduled Castes (SC) 16.8% Known as ‘untouchables’ before  Scheduled Tribes (ST) 8%  Other Backward Classes 27% (or more) Even with conservative estimates, more than 50% of India’s population suffers systematic disadvantage and depravation

29  The literacy rate among Muslims is substantially below the national average (59% as opposed to 65%). Only 3.4 per cent of the Muslim population obtains graduate degrees  In the elite government jobs, Muslim representation is no more than 4%  31 % of Muslims below the poverty line (SC/ST categories 36.4%).  40.7 per cent of Muslims fall in the Other Backward Classes (OBCs) category.

 Gender inequality index: 72  Sex ratio  Female foeticide: some 50 million girls are missing  Discriminated in labour market – not by blocking access, but by using them in particular jobs, insecure, informal, without collective bargaining  Education, wages less than men  Political representation: 0.1% in the parliament

 Who is the agent of this change?  Who designed it and implemented it?  What would it have looked like if others designed it?